Interest rates haven’t slowed the real estate market down, they’ve just changed what people are buying.
The Calgary real estate market continues to roll, setting another record for sales last month. August saw 2,729 homes changing hands, and the average price in the overall market climb to $570,000. Interest rates hikes haven’t done anything to the overall demand in the city, they’ve just changed what people are buying. This is a city where single family homes were the flavour of the day for the past two decades. The amount of land we had available and the value of it made apartment style condos a bit of an afterthought. They floundered every year after 2007, lots of people losing money on their investments between then and 2021. Now, that has totally changed. Last month, compared to the same month in 2022, the number of apartment sales soared by 70%, and the prices jumped almost 14%. Row houses did even better, with prices jumping almost 16%.
Inventory continues to be a problem.
The housing crunch continues to be an issue in Calgary, and is getting worse. At the moment, there are 3,254 properties for sale in our region, down 32% over the same time last year, when we thought inventory was already tight. Usually, we have around 6,000 homes for sale this time of year in a balanced market. Every month 87% of all new inventory is being gobbled up. At that rate, it's tough to make any significant gains in available product. Don't expect things to change anytime soon at that rate of absorption.
The story in between the numbers
The numbers are one thing, but the real story is what's happening on the street, every day when you do this for a living. Just because your friend got into a multiple offer on their home, and sold it for $10,000 more than asking, it doesn't mean that is happening in the entire market. Sure, with tight inventory, multiple offers can be more prevalent, but they aren't the rule. Just look at the average days on market. It's still hovering around 25. In fact, when prices start to climb like this, sellers tend to get overconfident, and ask too much for their homes. Multiple offers don't happen on those houses, as buyers are savvy and have too much information at their finger tips. They aren't going to drastically pay over what the last home sold for.
Just like any market, three things sell a house: great staging, awesome marketing, and the right price.
Have a great week and enjoy the weather while it lasts! If you want to check out the latest stats from the Calgary Real Estate Board, click here. If you want to chat about anything real estate, call or text anytime. The coffee is always on me.
Ken Rigel Group @ EXP Realty
O: 403 207 1748
C: 403 835 6338
email: [email protected]